Gabriel Motomura, partner and co-head of BTG Pactual Empresas, and Rogério Stallone, BTG Pactual corporate credit partner and co-head of BTG Empresas, discuss SME productivity.
Global Finance: Small and midsize enterprises (SMEs) face a productivity gap compared with larger firms. What does BTG Pactual Empresas offer to improve SME productivity?
Rogério Stallone: Other banks and startups typically start with banking and then move to lending. Access to credit is the biggest bottleneck in Brazil today. That’s why BTG Pactual, the largest investment banking in Latin America, began to operate in this segment through credit. As a full-service bank, we have a lot of banking products, but we decided to start this project in 2019 with an offer that we knew would be a hallmark for the segment. We now have a credit portfolio of around $4.6 billion, with the aim of reducing corporate inequality.
Our strategy is to combine efforts and support SMEs in a market that was, until then, dominated by large companies. We believe that with appropriate credit and the right pricing, SMEs have the capability to operate competitively with other players, which is a good thing for the market as a whole.
Gabriel Motomura: On the cash management side of the business, we are also very focused on increasing our clients’ productivity. Just a few examples: Here in Brazil, and thinking almost worldwide, SMEs must log in to their bank website and then process payments, entering information individually. Huge companies can upload files from their ERPs and process those files within the bank, have feedback on whether the transactions went over or not, and then input that into their systems.
Here at BTG, we automated this task. For example, you can use Excel spreadsheets or Google Sheets. You enter the payments you want to make within that spreadsheet and then upload the spreadsheet to BTG, so there is no code platform. Instead of spending hours processing payments, you can do it in five minutes, maximum. We can update your bank statement automatically, and in Excel as well. We create a new line in your spreadsheet for every payment you make and save that transaction for you.
Another bottleneck is the payment of invoices, and we can also save them in Google Drive or OneDrive for you while you keep all your receipts in a single location. Whenever you want to verify a transaction with a supplier or a client, you can access that 24/7 with no logging needed.
GF: Are the offerings for all SME clients, or do you offer specialized offerings based on their sector, such as agribusiness?
Stallone: Yes, we customize some products depending on the sector. For example, agribusiness represents around 30% of Brazil’s GDP. We created a new credit card just for the agribusiness segment. Clients can use our credit card to buy raw materials, seeds, and other things and pay for them after they receive the money from the harvests. This is just an example of a product that we just launched.
GF: Some global banks have recently merged their business banking lines with their corporate and investment bank businesses to help SMEs grow to be larger clients. Is this on the bank’s road map?
Stallone: BTG Pactual historically was a wholesale bank, with more than 40 years of history. In the past, its focus was on large companies in Brazil. Why? Not because it didn’t like SMEs but because we didn’t have the appropriate products and services for them. Since 2019, we have invested heavily in IT and digitazation to offer SMEs the same products and services that large corporations can access.
GF: Do you still feel like a startup, six years since your launch?Motomura: Sure, part of that is how we organize ourselves. For example, we may be the singular segment within the bank where the business and IT teams actually sit next to each other. We have a very lean structure. We are just 60 people businesswide, covering more than 100,000 companies. It’s 100% based on technology. We couldn’t do it otherwise.